Exclusive Stellar (XLM) Pumps After Completing Double Bottom Pattern

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In Brief
  • XLM is trading above long-term support at $0.192.

  • It has completed a double bottom pattern.

  • Short-term indicators are showing some weakness.

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Stellar (XLM) has been moving downwards since May but briefly reversed its trajectory and rebounded on June 22.

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XLM has created a bullish pattern and is now aiming for the closest resistance levels.

Long-term XLM support levels

XLM had been moving downwards since May 10, after it reached a high of $0.80. The downward move continued until a low of $0.195 was reached on June 22. 

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The low was made at the 0.786 Fib retracement support level at $0.192. This is also a strong horizontal support area. The subsequent bounce confirmed this

However, despite the increase, technical indicators in the weekly time-frame are still bearish. The RSI is below 50, the Stochastic oscillator has made a bearish cross, and the MACD is nearly negative.

XLM Chart By TradingView

Breakout and double bottom

The daily chart is more bullish than the weekly outlook.

XLM broke out from a descending resistance line after making the June 22 low. Afterward, it returned near the same level on July 20, creating a double bottom pattern. 

Besides being a bullish pattern, the double bottom was combined with bullish divergences in the MACD, RSI, and Stochastic oscillator.

The closest resistance areas are found at $0.427 and $0.498. These are the 0.382 and 0.5 Fib retracement resistance levels.

XLM Chart By TradingView

Wave count

Cryptocurrency trader @TheTradingHubb outlined a XLM chart, stating that the price is approaching a resistance area near $0.29,

Source: Twitter

If the movement is indeed a flat A-B-C corrective structure, XLM would be expected to reach a top near the $0.292 level. This would give waves A:C a 1:1 ratio.

The next most likely level for the top of the C wave would be $0.35. This would g giving waves A:C a 1:1.61 ratio. Neither of these targets would reach any of the resistance levels previously outlined. This casts some doubt on the possibility that this is an A-B-C flat structure. 

XLM Chart By TradingView

In any case, the two-hour chart is showing weaknesses, warning of an impending rejection.

There are significant bearish divergences developing in both the MACD and RSI.

If XLM breaks down, the closest support levels are found at $0.251, $0.241, and $0.231.

XLM Chart By TradingView

For BeInCrypto’s latest bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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